At a Labor Day rally before union members in Boston on Sept. 7, President Obama unveiled a new executive order requiring federal contractors to offer employees up to seven days of paid sick leave. 

The proposal covers all employees working on contracts subject to the Davis-Bacon Act and the Service Contract Act.

“The president has long treated the federal contracting marketplace as a testing ground to implement sweeping changes that he cannot pass through Congress,” said ABC Vice President of Government Affairs Geoff Burr. “By circumventing Congressional authority, the Obama administration has increased regulatory burdens that drive up costs on taxpayer-funded projects and discourage small businesses from pursuing federal contracts.

“The president’s latest proposal is of particular concern to the construction industry because it contradicts the U.S. Department of Labor’s long-established policy of crediting sick leave as a fringe benefit for employees performing work on contracts subject to the Davis-Bacon Act,” said Burr. “This will result in additional compliance burdens for contractors who contract with the federal government.”

The U.S. Department of Labor (DOL) has until September 30, 2016, to issue final regulations and the Federal Acquisition Regulatory (FAR) Council will incorporate the rule into federal regulations within 60 days of the final regulation. The new provision will be included in any new contract from January 1, 2017, going forward.

While the details and practical impact of the proposal on the construction industry and taxpayers will not be known until finalized and implemented, ABC will participate in the forthcoming regulatory process. Please stay tuned for future information about this proposal in Newsline and requests for feedback about the impact of this proposal on construction businesses covered by this proposal.

Since taking office, President Obama has issued at least 12 Executive Orders pertaining to government contracting, resulting in 16 new regulations. This proposal is the latest in a series of executive orders targeting federal contractors that the federal contracting community expects will disrupt federal contracting, increase costs and raise a number of compliance concerns.

Link to White House Fact Sheet on Paid Sick Leave EO